SHREE SHYAM BABA EXIM PRIVATE LIMITED,NEW DELHI V. ITO-WARD 23(3), NEW DELHI, C R BUILDING

ITA 3265/DEL/2024

AI Insights

The case involves Shree Shyam Baba Exim Pvt. Ltd, which appealed against the order of the National Faceless Appeal Centre (NFAC) confirming an addition of Rs 29,97,128 as unexplained cash credit under section 68 of the Income-tax Act, 1961. The original assessment was reopened under section 147 due to the alleged failure to prove the creditworthiness of a lender from whom the company received an unsecured loan. The ITAT found that the NFAC had decided the issue ex parte without a merits-based adjudication and thus restored the case to NFAC for a thorough re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470153 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR
• Assessee Lawyers: SHIVANI SHAH
• Keywords: Opportunity of being heard; Unexplained cash credit; Reason to believe
• Section: 148; 143(3); 68

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No. 3265/Del/2024 (Assessment Year: 2012-13) Shree Shyam Baba Exim Pvt. Ltd, A-17/1, Rana Pratap Bagh, New Delhi- 110007 Vs. Income Tax Officer, Ward-23 (3), New Delhi PAN: AAFCS5579Q Assessee by : Ms. Shivani Shah, Adv Revenue by: Shri Sanjay Kumar, Sr. DR Date of Hearing 11/02/2025 Date of pronouncement 11/02/2025 O R D E R 1. The appeal in ITA No.3265/Del/2024 for AY 2012-13 arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] dated 12.06.2024 against the order of assessment passed u/s 143(3) r.w.s. 147 of the Income-tax Act, 1961 dated 25.12.2019 (hereinafter referred to as ‘the Act’) by ITO, Ward-23(3), New Delhi (hereinafter referred to as ‘ld. AO’). 2. The only effective issue, apart from challenging the validity of assumption of jurisdiction u/s 147 of the Act , to be decided in this appeal is as to whether the ld NFAC was justified in confirming the addition made in the sum of Rs 29,97,128/- u/s 68 of the Act in the facts and circumstances of the instant case. 3. We have heard the rival submissions and perused the materials available on record. The return of income for the Asst Year 2012-13 was ITA No. 3265/Del/2024 Shree Shyam Baba Exim Pvt. Ltd Page | 2 filed by the assessee on 29-9-2012 declaring total income of Rs 5,78,840/- . The assessment was completed u/s 143(3) of the Act. In the said scrutiny proceedings, unsecured loan received from Shri Shashikant Agarwal was sought to be examined by the ld. AO by issuing notice u/s 133(6) of the Act, which stood properly complied by the said lender. The ld AO accordingly accepted the same to pass through all the parameters of section 68 of the Act. But in the reasons recorded, the ld AO observed that the creditworthiness of the said lender was not proved by the assessee company and accordingly he had reason to believe that income of the assessee company had escaped assessment warranting reopening u/s 147 of the Act. Accordingly, notice u/s 148 of the Act stood issued to the assessee on 31.3.2019. The assessee furnished return of income declaring total income of Rs 5,78,840/- on 13.6.2019 in response to notice u/s 148 of the Act and sought for reasons recorded for reopening the assessment which were duly provided to the assessee. The re-assessment was completed u/s 143(3) r.w.s. 147 of the Act adding the sum of Rs 29,97,128/- towards unsecured loan received as unexplained cash credit u/s 68 of the Act. 4. On perusal of the order of the ld NFAC, we find that the ld NFAC had decided the issue ex parte without adjudicating the issue on merits giving its independent finding. Hence, in the interest of justice and fairplay, we deem it fit and appropriate to restore this appeal to file of ld NFAC for de novo adjudication in accordance with law. Needless to mention the assessee be given reasonable opportunity of being heard. The assessee is directed to cooperate with ld NFAC for expeditious disposal of the appeal by not taking unwarranted adjournments. Hence, the grounds raised by the assessee are allowed for statistical purposes. ITA No. 3265/Del/2024 Shree Shyam Baba Exim Pvt. Ltd Page | 3 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 11/02/2025. -Sd/- (M. BALAGANESH) ACCOUNTANT MEMBER Dated: 11/02/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "